If Both Supply and Demand for a Good Increase at the Same

question 43

Multiple Choice

If both supply and demand for a good increase at the same time,which of the following must also increase?

• A)The equilibrium price
• B)The use of substitutes
• C)The equilibrium quantity
• D)The price of substitute goods

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Definitions:

EOQ Model

Economic Order Quantity Model, a formula used in inventory management to determine the optimal order size that minimizes the total cost of inventory.

Ordering Cost

The total expenses incurred in placing an inventory order, which can include costs for paperwork, communication, transportation, and handling.

Holding Cost

The expenses associated with storing unsold goods or materials, including warehousing, insurance, depreciation, and opportunity costs.

Optimal Order Quantity

Refers to the quantity of inventory that minimizes the total costs of inventory management, including ordering and holding costs.